TIDMCEY
RNS Number : 9897F
Centamin Egypt Limited
05 May 2011
Immediate Release 05 May 2011
CENTAMIN EGYPT LIMITED - QUARTERLY REPORT
FOR THE THREE MONTHS ENDED 31 MARCH 2011
For a full copy of the report please click on the link
provided
http://www.rns-pdf.londonstockexchange.com/rns/9897F_-2011-5-5.pdf
London (London Stock Exchange - 05 May 2011) Centamin Egypt
Limited ("Centamin" or "the Company") (TSX:CEE, LSE:CEY), the gold
mining group in Egypt, is pleased to announce its quarterly
update.
HIGHLIGHTS
Operations
v Quarterly gold production of 45,204 ounces was achieved from
the Sukari Gold Mine.
v Cash operating cost averaged US$525 per ounce for the
quarter.
v Average gold sales price US$1,405.
v Although some key supplies suffered short term interruptions,
operations were largely unaffected by the recent political events
in Egypt.
v SAG mill steel liner and lifter configuration performed to
design standard during the quarter, following installation in Q4
2010.
v Expected 2011 gold production guidance of an estimated
250-290,000 ounces remains intact, however, with the events that
transpired during the quarter, it is prudent to guide towards the
lower end of this range. Further guidance is planned for mid 2011
as more information becomes available on the timing and scale of
commercial underground production rates.
Mine Expansion / Development
v Stage 3 commissioning commenced on 01 May 2011, two months
ahead of the mid-2011 schedule and on budget. Construction
activities remained on schedule during the quarter with the
completion of all major activities.
v Front end engineering and design work continued on the Stage 4
expansion. Orders for long lead items are expected to commence
early in Q2 2011.
v A further 783m of underground development advance was
completed during the quarter, with ore drive and cross cut
development continuing. Initial trial stoping commenced during the
quarter.
v Exploration drilling on the Sukari hill returned a significant
intercept of 201m @ 2.30g/t from 568m which included 67m @5.89g/t
(from 702m). This intercept is outside the currently defined
ultimate pit design and approximately 1km north of the current
underground decline. Eight drill rigs continue to work on the
licence area with a revised resource statement expected during the
second half of 2011.
Corporate/Finance Activities
v Record quarterly operating profit of US$56.1M.
v Cash and liquid assets of US$185.6M, up from US$166M.
v Mr Mark Arnesen, Mr Mark Bankes and Mr Ed Haslam were
appointed as non executive directors and Mr Herbert Stuart
Bottomley retired as a non executive director during the quarter.
Mr Colin Cowden and Dr Thomas Elder shall be retiring in the
forthcoming quarter.
v The Company remains debt free and unhedged.
v All capital and ongoing operating expenses continue to be
financed from cash flows generated by gold revenues from the Sukari
Gold Mine.
Commenting on the quarterly results, Josef El-Raghy, Chairman of
Centamin said:
"This quarter saw the most profitable performance of the Company
to date at a time which presented some unusual and unforeseen
challenges. The Company's personnel deserve great credit for
navigating a safe path through these events and delivering solid
production results. With the recent early commissioning of Stage 3
and the significant drill intercepts in the north of the Sukari
Hill, the Company continues to bring to realisation the true
potential of this world class deposit".
SUKARI GOLD MINE
Production Statistics
December September
March 2011 2010 2010 June 2010
Quarter Quarter Quarter Quarter
------------- ----------- ----------- ----------- ----------- -----------
Open Pit Ore
Mined (1) ('000t) 1,212 2,123 1,682 1,400
------------- ----------- ----------- ----------- ----------- -----------
Total Open
Pit
Material
Mined ('000t) 4,552 5,975 4,916 5,305
------------- ----------- ----------- ----------- ----------- -----------
Strip Ratio waste/ore 2.8 1.8 1.9 2.8
------------- ----------- ----------- ----------- ----------- -----------
U/ground
Development
Ore Mined ('000t) 41 40 0 0
------------- ----------- ----------- ----------- ----------- -----------
Ore
Processed ('000t) 741 773 605 847
------------- ----------- ----------- ----------- ----------- -----------
Head Grade (g/t) 1.94 2.30 1.75 1.37
------------- ----------- ----------- ----------- ----------- -----------
Gold
Recovery (%) 86.7 88.1 82.6 86.5
------------- ----------- ----------- ----------- ----------- -----------
Gold
Produced -
Dump Leach (oz) 2,676 2,387 3,049 2,791
------------- ----------- ----------- ----------- ----------- -----------
Gold
Produced -
Total (2) (oz) 45,204 53,189 30,243 30,236
------------- ----------- ----------- ----------- ----------- -----------
Cash
Operating
Cost of
Production
(3) US$/oz 525 498 638 569
------------- ----------- ----------- ----------- ----------- -----------
Gold Sold (oz) 63,240 35,150 31,228 30,759
------------- ----------- ----------- ----------- ----------- -----------
Average
Sales
Price US$/oz 1,405 1,369 1,239 1,203
------------- ----------- ----------- ----------- ----------- -----------
Notes:-
(1) Includes 435k tonnes @ 0.61 g/t placed on dump leach
pads.
(2) Gold produced is gold poured and does not include
gold-in-circuit at period end.
(3) . Cash operating costs excludes royalties, exploration and
corporate administration expenditure.
Operational Performance Overview
For the March quarter, a total of 1.2Mt of ore @ 1.10g/t Au was
mined with a total quarterly material movement of 4.6Mt and
resultant waste to ore ratio of 2.8:1. As previously announced,
material movement from the open pit mining operation was reduced
late in the quarter due primarily to delays in the delivery of
blasting accessories. The minor supply interruptions have since
been resolved with material movement rates expected to return to
normal during the course of the second quarter. Mining of the Stage
1 pit progressed to the 1040mRL (approximately 60 metres below wadi
level) and Stage 2 mining progressed to the 1124mRL. Mining
continued in the Stage 1A cutback on the eastern flank of Stage 1
down to the 1076mRL.
A variety of ancillary equipment to support mining and related
project activities was commissioned during the quarter with three
CAT785C 150t dump trucks and further ancillary equipment scheduled
for delivery during the second quarter of 2011 to support the
projected increase in mining volume as part of the 5Mtpa plant
expansion.
Process plant throughput for the December quarter of 741,148
tonnes, 4% below the previous quarter with the first change out of
the SAG mill liners successfully completed during the last week of
March. The SAG mill steel liner and lifter system provided much
improved rates of throughout and availability.
Dump leach pads continue to be irrigated with a total placement
by end of quarter of approximately 3.0Mt of low grade ore at an
average dumped grade of 0.5 g/t.
Resultant cash cost per ounce for the quarter was US$525, in
line with expectations given the reduced material movement from
open pit operations and the planned mill reline activities late in
the quarter.
Underground Mine Development
Underground development recorded an overall advance of 783
metres for the quarter, including continued development of the main
Amun decline (113m), ore drives and cross cut development (670m) as
well as associated ventilation decline and escape way
infrastructure. The main ventilation exhaust fan was successfully
installed and commissioned during the quarter which will allow
further decline development to take place in the coming
quarters.
Trial stoping of the high grade Hapi Zone commenced during the
quarter, with a total of 40,662 tonnes @ 7.29g/t of development ore
produced during the quarter. By the end of the quarter, ore drive
development had continued through to the 890 level.
A total of 1,571m of underground definition drilling was
completed during the quarter. Determination of the optimal
underground mining method shall take place during the first half of
2011, following completion of definition drilling programme.
Exploration
During the quarter, resource definition drilling continued to be
mainly concentrated in the Hapi, Amun Deeps and Pharaoh zones and
in converting inferred resource into measured and indicated status.
In total, 14,960m of diamond drilling was completed during the
quarter. The current drill programme continues to show success in
targeting the down dip and along strike extension of the Hapi Zone
and other parallel high grade structures within the main porphyry.
These zones along the entire strike length of Sukari Hill (2.5km)
are the target of the comprehensive infill and extension drilling
with 8 diamond coring rigs.
Significant assays returned were as follows:-
D1601 - 11m @ 2.18g/t from 287m
D1609 - 26m @ 2.08g/t from 703m
D1611 - 12m @ 13.36g/t from 455m
D1612 - 201m @ 2.30 g/t from 568m including
67m @ 5.89 g/t from 702m
D1624 - 19m @ 2.14g/t from 266m
SUKARI GOLD MINE EXPANSION
Stage 3 Expansion - Secondary Crushing
Construction activities continued throughout the quarter with
all major civil and erection works now completed. Installation of
the conveyor drives is scheduled for the second quarter of 2011
with commissioning activities scheduled thereafter.
Stage 3 is targeting a mill throughput increase to 5Mtpa and
project completion is expected in mid 2011.
Capital expenditure for the quarter and project to date was
US$4.5M and US$13.0M respectively.
Stage 4 Expansion - 10Mtpa
Front end engineering and design activities continued during the
quarter based upon the selectedconventional process flow route of
SAG/Ball Mill grinding configuration (similar to the current plant
configuration).
Final Board commitment for the Stage 4 expansion is expected
during the second quarter of 2011, following completion of front
end engineering and design activities. Stage 4 completion is
targeted to occur at the end of 2012.
It is intended that both Stage 3 and Stage 4 expansions will be
financed entirely from cash flow generated from gold sales.
RESOURCE AND RESERVE DEFINITION
Sukari Global Resource
0.5 g/t Cut-off Tonnes Grade Gold
Au (Mt) (g/t Au) (Moz)
---------------------- ------- ---------- -------
Measured & Indicated 235.73 1.45 10.99
---------------------- ------- ---------- -------
Inferred 68.9 1.6 3.5
---------------------- ------- ---------- -------
TOTAL 304.6 1.48 14.5
---------------------- ------- ---------- -------
Notes to table: Figures in table may not add correctly due to
rounding. Proven and probable ore reserves are included in mineral
resources. Figures are below the August 2010 mined surface.
Sukari Mineral Reserve
Proven Probable Mineral Reserve
---------------- ---------------- --------------------------
Tonnes Au Tonnes Au Tonnes Au Cont Au
(Mt) (g/t) (Mt) (g/t) (Mt) (g/t) (Moz)
------- ------- ------- ------- ------- ------- --------
102.4 1.09 142.9 1.19 245.4 1.15 9.1
------- ------- ------- ------- ------- ------- --------
The mineral reserves are based on the resource model announced
on 08 June 2010 which includes drilling up to 31 May 2010 and below
the August 2010 mined surface, a gold price of US$900 per ounce and
a cut-off grade of 0.3 g/t Au for oxide transition and sulphide
material.
Sukari Global Resource and Mineral Reserve Growth
CORPORATE ACTIVITIES
At the end of the quarter, the Company had US$185M in available
cash and liquid assets. The Company remains debt free and
unhedged.
The Company announced several changes to its Board during the
quarter. Mr Mark Arnesen, Mr Mark Bankes and Mr Ed Haslam were
appointed as non executive directors, adding a breadth of
experience to the Centamin Board. Mr Herbert Stuart Bottomley
retired as a non executive director during the quarter, and Mr
Colin Cowden and Dr Thomas Elder are due to retire at the
conclusion of the Company's Annual General Meeting on 26 May 2011.
The Board would like to thank all the retiring directors for their
efforts and guidance over the years and for helping to establish
Centamin as a gold producer.
On behalf of Centamin Egypt Limited
Josef El-Raghy
Chairman
05 May 2011
Centamin Egypt Limited will host a conference call on Thursday,
05 May 2011 at 11:30am (London, UK time) to update investors and
analysts on its quarterly results. Participants may join the call
by dialling one of the following four numbers, approximately
10 minutes before the start of the call.
Participant pass code: 862573#
From UK: (toll free) 0800 368 1895 From US: (toll free) 1866 928
6049
From Canada: (toll free) 1866 561 8617 From rest of world: + 44
20 3140 0693
A live audio webcast of the call will be available on:
http://mediaserve.buchanan.uk.com/2011/centamin050511/registration.asp
A replay of the webcast will be available on the same link from
1.00 pm (London, UK time) on Thursday, 05 May 2011.
For further information, please contact:-
Josef El-Raghy, Chairman or Bobby Morse / Katharine Sutton,
+ 61 (8) 9316 2640 or + 203 Buchanan Communications Limited
5411 259 + 44 (0) 20 7466 5000
www.centamin.com
COMPETENT PERSONS STATEMENT
Quality Assurance and Control and Qualified Person
The information in this report that relates to ore reserves has
been compiled by Mr Andrew Pardey. Mr Pardey is a Member of the
Australasian Institute of Mining and Metallurgy and is a full time
employee of the Company. He has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity he is undertaking, to qualify as
a "Competent Person" as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves" and is a "Qualified Person" as defined
in the "National Instrument 43-101 of the Canadian Securities
Administrators" and "CIM Definition Standards For Mineral Resources
and Mineral Reserves" of December 2005 as prepared by the CIM
Standing Committee on Reserve Definitions of the Canadian Institute
of Mining. Mr Pardey's written consent has been received by the
Company for this information to be included in this report in the
form and context which it appears.
The information in this report that relates to mineral resources
is based on work completed independently by Mr Nicolas Johnson, who
is a Member of the Australian Institute of Geoscientists. Mr
Johnson is a full time employee of Hellman and Schofield Pty Ltd
and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a "Competent Person"
as defined in the 2004 edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National
Instrument 43-101 of the Canadian Securities Administrators". Mr
Johnson consents to the inclusion in the report of the matters
based on his information in the form and context in which it
appears.
Information in this report which relates to exploration,
geology, sampling and drilling is based on information compiled by
geologist Mr Richard Osman who is a full time employee of the
Company, and is a member of the Australasian Institute of Mining
and Metallurgy with more than five years experience in the fields
of activity being reported on, and is a 'Competent Person' for this
purpose and is a "Qualified Person" as defined in "National
Instrument 43-101 of the Canadian Securities Administrators". His
written consent has been received by the Company for this
information to be included in this report in the form and context
which it appears.
All exploration and resource samples were analysed by Ultra
Trace Pty Ltd, Canning Vale, Western Australia. All mine based
production samples were analysed by Sukari Assay Laboratory,
Egypt.
Refer to the updated Technical Report which was filed in
December 2010 for further discussion of the extent to which the
estimate of mineral resources/reserves may be materially affected
by any known environmental, permitting, legal, title, taxation,
socio-political, or other relevant issue.
CORPORATE INFORMATION
CORPORATE DIRECTORY
Directors
Mr Josef El-Raghy, Chairman
Mr Harry Michael, Chief Executive Officer
Mr Trevor Schultz, Executive Director of Operations
Mr Edward Haslam, Senior Non Executive Director
Mr Colin Cowden, Non Executive Director
Dr Thomas Elder, Non Executive Director
Professor Robert Bowker, Non Executive Director
Mr Mark Arnesen, Non Executive Director
Mr Mark Bankes, Non Executive Director
Senior Management
Mr Marco Di Silvio, Chief Financial Officer
Mrs Heidi Brown, Company Secretary
Registered Office
57 Kishorn Road, Mount Pleasant WA 6153, Australia
Tel: + 61 8 9316 2640
Fax: + 61 8 9316 2650
Email: centamin@centamin.com.au
Website: www.centamin.com
Egypt Office
361 El-Horreya Road, Sedi Gaber, Alexandria, Egypt
Tel: + 203 5411 259
Fax: + 203 522 6350
Auditor
Deloitte Touche Tohmatsu
Level 14, 240 St Georges Terrace, Perth WA 6000
Share Registries
Australia
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
Perth WA 6000
Telephone: + 61 8 9323 2000
Canada
Computershare
100 University Avenue, 8(th) Floor
Toronto, Ontario, ON M5J 2Y1
Telephone: + 1 416 263 9311
United Kingdom
Computershare Investor Services
PO Box 82, The Pavilions, Bridgwater Road
Telephone: + 44 870 702 0003
Stock Exchange Listings
London Stock Exchange, LSE code: CEY
Toronto Stock Exchange, TSX code: CEE
ABOUT CENTAMIN EGYPT LIMITED
Centamin is a mineral exploration, development and mining
company that has been actively exploring in Egypt since 1995. The
principal asset of Centamin is its interest in the Sukari Gold
Mine, located in the Eastern Desert of Egypt. Construction at the
Sukari Gold Project commenced in March 2007 with the first gold bar
being produced on 26 June 2009.
Optimal design throughput at the Sukari Gold Mine was achieved
during December 2009. In January 2010, the Company announced that
Sukari had achieved yet another important milestone with the
commencement of gold exports to a nominated overseas gold
refinery.
The Sukari Gold Mine is the first large-scale modern gold mine
in Egypt. Centamin's operating experience in Egypt gives it a
significant first-mover advantage in acquiring and developing other
gold projects in the prospective Arabian-Nubian Shield.
FORWARD LOOKING STATEMENTS
Certain information contained in this report, including any
information on Centamin's plans or future financial or operating
performance and other statements that express management's
expectations or estimates of future performance, constitute
forward-looking statements. Such statements are based on a number
of estimates and assumptions that, while considered reasonable by
management at the time, are subject to significant business,
economic and competitive uncertainties. Centamin cautions that such
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual financial results, performance or
achievements of Centamin to be materially different from the
Company's estimated future results, performance or achievements
expressed or implied by those forward-looking statements. These
factors include the inherent risks involved in exploration and
development of mineral properties, changes in economic conditions,
changes in the worldwide price of gold and other key inputs,
changes in mine plans and other factors, such as project execution
delays, many of which are beyond the control of Centamin.
Nothing in this report should be construed as either an offer to
sell or a solicitation to buy or sell Centamin securities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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